DUESSELDORF, Germany -- Continuing confusion in Germany over corporate-tax regulations led to a 9.8% decline in the number of merger-and-acquisition transactions in 1999, according to an annual study published by M&A International GmbH.

As part of its 1998 election platform, the SPD-Green coalition threatened to increase taxes on the sale of corporate assets, leading many small and medium-size German companies, the so-called...